USPTO Proposes Change In Claim Construction Standard For Post-Grant Proceedings

By Reza Mollaaghababa
On May 9, 2018, U.S. Patent and Trademark Office (PTO) issued a notice of proposed rule for changing the standard for construing claims in unexpired patents in inter partes review (IPR), post-grant review (PGR), and transitional covered business method (CBM) proceedings from current broadest reasonable interpretation (BRI) to the same claim construction standard that is utilized in the federal courts, i.e., the so-called Phillips standard.

Under the Phillips standard, the words of a claim are generally given their ordinary and customary meaning. In contrast, in post-grant review proceedings, the more expansive BRI standard is employed, which expands the scope of prior art that can be applied to invalidate the challenged claims.  The BRI standard  has been in fact outcome determinative in many of the proceedings.

The notice of proposed rule indicates that the U.S. Supreme Court has endorsed the PTO’s ability to choose an approach to claim construction for AIA proceedings. It also indicates that the proposed change in the claim construction standard could lead to greater uniformity and predictability between the claim constructions adopted by the PTAB and the federal courts.  This change will also harmonize the standard used for patentability and infringement, which could otherwise lead to unfair results.  For example, under BRI, it is possible for a patent claim to be invalidated based on a prior art reference although the construction of the same claim in an issued patent under the Phillips standard would not lead to a conclusion of infringement.  Moreover, there have been cases of a patent being found valid and infringed in a district court action but subsequently being found invalid by the PTO under the BRI standard.

The proposed change applies not only to the claims of an unexpired patent but also to claims presented in a motion to amend. “Under the proposed approach, the PTAB would construe patent claims based on the record of the IPR, PGR, or CBM proceeding taking into account the claim language itself, specification, and prosecution history pertaining to the patent.”  Further, consistent with the Phillips standard, extrinsic evidence, such as expert testimony and dictionaries, may be useful in determining what a person of ordinary skill would understand the claim terms to mean; however, extrinsic evidence is viewed as less reliable than intrinsic evidence.

Further, consistent with the Phillips standard, “the doctrine of construing claims to preserve their validity would apply to AIA trials.”  The notice, however, cautions that the doctrine of construing claims to preserve their validity has been limited to cases in which “the court concludes, after applying all the available tools of claim construction, that the claim in ambiguous.”  Further, the Federal Circuit “repeatedly and consistently has recognized that the courts may not redraft claims, whether to make them operable or to sustain their validity.”

The PTO intends that any proposed rule changes adopted in a final rule would be applied to all pending IPR, PGR, and CBM proceedings before the PTAB. The Office is presently soliciting comments on the proposed change, where written comments must be received by July 9, 2018 to ensure consideration.

CAFC Finds Another PTAB Claim Construction Unreasonable and Again Reverses an Invalidity Holding

By Reza Mollaaghababa
In an inter partes review (IPR) proceeding, the meaning of terms used in challenged claims of an unexpired patent are given their broadest reasonable interpretation in light of the claim language and the specification. The Court of Appeals for the Federal Circuit (CAFC) recently reversed the Board’s interpretation of a claim term in an IPR proceeding (IPR2015-00460) in which Samsung had challenged the validity of certain claims of U.S. Patent No. 6,146,997 of Home Semiconductor Corp. (“Home”) because it found that Board had adopted a claim construction “without regard to the context” in which the term was used in the claims and the specification. In a decision written by Judge Lourie last month, the Federal Circuit panel found that the PTAB had adopted an erroneous interpretation and reversed the decision stating that the PTAB’s finding of invalidity based by anticipation of claim 2 was “not supported by substantial evidence.” (See, Home Electronics v. Samsung Electronics, CAFC Decision No. 2016-2215, July 25, 2017).

The ’997 Patent concerned “a simplified method for forming a self-aligned contact hole,” in which a conductive plug can be formed to electrically connect the semiconductor device to other circuit elements. Independent claim 1 of the ‘997 Patent recites a method of forming a self-aligned contact hole in a semiconductor substrate having a gate electrode and a diffusion region by

forming a conformal layer of etch barrier material overlying the substrate surface including the diffusion region and the upper surface and the sidewalls of the gate electrode,

forming an insulating layer overlying the barrier layer, etching an opening through the insulating layer self-aligned and borderless to the diffusion region by using the barrier layer as an etch stop, and

anisotropically etching the barrier layer underneath the opening, thereby exposing the diffusion region and simultaneously forming a spacer of the etch barrier material on the sidewall of the gate electrode.

Claim 2 of the ‘997 Patent, which depends on claim 1, further recites “forming an oxide layer over the diffusion region and on the sidewalls of the gate electrode by thermal oxidation prior to forming the barrier layer.”

The construction of the phrase “forming an oxide layer over the diffusion region” was at issue in this proceeding. The Patent Owner, Home, argued that this phrase should mean “forming an oxide layer covering the diffusion region,” while the Petitioner, Samsung, argued that the broadest reasonable construction of this phrase is “forming an oxide layer above the diffusion region.” Samsung argued that construing “over” as “covering” was too narrow a reading for a person of ordinary skill in the art. The Board adopted Samsung’s proposed construction for this term and hence held that claims 2 and 9-14 of the ‘997 Patent were anticipated by U.S. Patent No. 6,277,720 (“Doshi”).

The CAFC held that the Board’s construction of “over” as meaning “above” is unreasonable in light of the claim language and the specification. The CAFC noted that “[i]n adopting the ‘full breadth’ of the term as advocated by Samsung, the Board focused on the word ‘above,’ rather than the claim term ‘over.’ That was error.” The CAFC further emphasized that “[e]ven when giving the claim term the broadest reasonable interpretation, the Board cannot construe the claims ‘so broadly that its constructions are unreasonable under general claim construction principles.’”

The CAFC reasoned that the language at issue “is not simply ‘over,’ but is ‘forming an oxide layer over the diffusion region,” and the use of the term ‘over’ in ‘forming an oxide layer over the diffusion region’ connotes more than an insignificant or incidental vertical overlap between the oxide layer and the diffusion region. Although ‘over’ and ‘above’ can be interchangeable in certain contexts, they are not coextensive here, and the full scope of ‘above,’ which is not a claim term, cannot be adopted to give meaning to the actual claim term ‘over’ if that adoption would result in an unreasonable interpretation of the claim term in the context.” Continue reading “CAFC Finds Another PTAB Claim Construction Unreasonable and Again Reverses an Invalidity Holding”

CAFC Vacates a PTAB Decision Due To Faulty Claim Construction

By Reza Mollaaghababa
In a rare case of disagreeing with the Patent Trial and Appeal Board (PTAB), the Court of Appeals for the Federal Circuit (CAFC) vacated and remanded a PTAB decision invalidating claims 10-25 of PPC Broadband, Inc.’s U.S. Patent No. 8,323,060, which were challenged in an inter partes review (IPR) proceeding by Corning Optical Communications RF, LLC. (IPR2013-00342).

The challenged claims of PPC’s patent relate to a coaxial cable connector and require that the cable connector include “a continuity member having a nut contact portion positioned to electrically contact the nut and positioned to reside around an external portion of the connector body when the connector is assembled …” The Board held that the broadest reasonable construction of “reside around” was “in the immediate vicinity of; near.” Based on this construction, the Board concluded that the claims were obvious in view of the references cited by the petitioner, Corning, against the claims.

The Board reached this construction by relying on the broadest dictionary definition of the term “around.” In contrast, PPC (the patent owner) had proposed that the broadest reasonable construction of the term “reside around” in light of the claims and the specification is “encircle or surround.”

The CAFC sided with the patent owner and held that in the context of the patent the Board’s construction was not reasonable. The CAFC explained that “[t]he fact that ‘around’ has multiple dictionary meanings does not mean that all of these meanings are reasonable interpretations in light of the specification.” The CAFC further stated that all of the claims of the patent are directed to coaxial cable connectors and the components of these connectors partially or wholly encircle the inner electrical conductor. The CAFC emphasized that “[g]iven the context of this technology, it seems odd to construe the term ‘reside around’ without recognizing the context of its use in terms of the coaxial cable at issue.” Continue reading “CAFC Vacates a PTAB Decision Due To Faulty Claim Construction”